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Verizon is willing to pay local franchise fees and to get local government approval of its network construction, but draws the line on full local franchise agreements for the video service it plans to offer later this year on its FiOS fiber-to-the-premises network, Chairman and CEO Ivan Seidenberg said yesterday.

In a press conference following his Supercomm 2005 keynote address, the Verizon executive said his company understands that local governments don't want to lose out on existing revenue from video fees and want to manage the disruption caused by digging up neighborhoods to bury fiber.

"This is not an issue of us paying our fair share--we are willing to get licenses with reasonable rules," Seidenberg said. "But we are the second, third or in some cases, the fourth video service provider--it's bizarre to ask us to file for a franchise under the same terms as the first provider did, as a monopoly. And when we talk to public officials about this, they tend to agree with us."

The FiOS buildout is on schedule, and its service penetration rates are "faster than other technologies have been," he said. "In our first Texas market of Keller, we achieved 30% penetration in eight months. We've had really high early penetration, and we're very excited about it."

The Verizon CEO described cable TV company efforts to force local franchise rules onto the telcos as they enter video as the expected opposition.

"It's common sense that cable companies see us as insurgents, and it's in their interests to slow us down," he said.

In his keynote address, Seidenberg emphasized the economic impact of Verizon's investments in broadband, including wireless EV-DO networks delivering Vcast video services to handsets and the FiOS buildout. Verizon spent $13.3 billion in capex in 2004 and will increase that by 10% this year.

"These are the ripples helping to build the next big wave," leading to U.S. economic growth and new jobs, Seidenberg said.

In Marlboro, Mass., Verizon supplier FONS experienced 300% growth last year and 40% growth in employment and will go up another 200% this year in revenues, Seidenberg said. Another Verizon supplier, Corning, delivered nearly 40 new products in 2004 as a result of its work with the telco, he added.

"This is hard evidence of innovation and investment driving economic growth in this country," Seidenberg commented.

Such investment "is a crucial factor in restoring the U.S. to its leadership position," he said. "It is important to keep our foot on the accelerator when it comes to broadband investment."

For companies such as Verizon, the key to doing that is less regulation, the simplified local franchising process and agreement with digital content creators on the best way to use technology to protect their digital rights, he said.

Seidenberg told the assembled press members that Verizon is having no trouble acquiring the content it needs for launching video over FiOS later this year. He said the Vcast mobile video service is going well and should really take off during the holiday selling months, when Verizon is planning major sales campaigns.